The arguments by Canadian corn producers against subsidized imports from the United States are so weak that the investigation of the complaint should be killed, says the United States trade department.
In a brief filed last week with the Canadian International Trade Tribunal, the office of the U.S. trade representative argued that low Canadian corn prices are the result of low international prices rather than imports from the U.S.
The issue of whether American corn subsidies depress international prices generally and therefore affect Canadian farm incomes is beyond the scope of CITT investigations, argued the U.S. office.
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“The parties should not be required to expend the effort and resources necessary for a full dumping and subsidization investigation and a full injury inquiry – setting aside the market disruption that would occur in the event that provisional duties were imposed – when it is clear that complainants will not be able to demonstrate even a prima facie case of injury by reason of imports of the subject goods,” the U.S. said in a brief to the CITT Oct. 18.
Canada’s corn producers have proposed anti-dumping and countervail duties of close to $1 per bushel on imported U.S. corn, alleging that the imports of subsidized product depress Canadian prices.
The corn producers’ application for import protection has been met with a firestorm of opposition from corn users ranging from livestock producers to ethanol plants, fearing higher costs.
The CITT has promised a final decision by Nov. 15. If it decides there is a case, temporary duties could be imposed with a subsequent injury investigation to decide the appropriate permanent duty.
The U.S. submission noted that from imports of 4.1 million tonnes of corn in 2002-03, imports fell to 2.1 million tonnes the next year and to less than 2.4 million tonnes in 2004-05.
“While Canadian prices for grain corn have declined since 2002-03, it is apparent that competition from imports of U.S. grain corn has not been the cause of the decline,” said the U.S. submission. “Therefore, imports from the United States are not the cause of any injury to Canadian corn growers resulting from these lower prices.”
It said the level of imports in any year is not related to prices but to supply.
“The levels of import into Canada of grain corn from the United States in any given year has little if anything to do with fluctuations in international prices but rather depends on local weather variations on both sides of the border, the pricing and availability of substitutable animal grain feeds and other similar factors,” said the U.S. brief.
“The question here is whether imports of grain corn from the United States are injuring or threatening injury to Canadian producers. The United States submits that the declining volume of U.S. imports is not.”
